Europe’s Regional Airlines Fight for Equal Treatment

 - November 1, 2011, 9:00 AM
Mike Ambrose

On several fronts Europe’s regional airlines face challenges to achieve parity with larger airlines–which operate larger aircraft and wield more clout–and the heavily subsidized rail sector.

At its annual conference, held in Rome September 28 to 30, the European Regions Airline Association (ERA) revealed its own study comparing state support for the rail and air sectors. The study, entitled “Air and Rail: Setting the Record Straight–environment, investment, mobility and political bias,” showed that subsidies for rail exceed those for air transport by a factor of 125. “The conclusion is clear–both modes offer a solution to providing intra-european transport, but the case for rail as the ‘preferred’ mode by policymakers and transport planners can no longer be justified,” said ERA director general Mike Ambrose.

As ever, the association’s member airlines face a range of legislative proposals that the ERA considers to be rarely well considered and often carrying hidden threats. One such legislative package for 2012 involves the so-called Airports Package, which threatens to squeeze out of key airports carriers that operate regional aircraft. A consultancy report for the European Commission has recommended encouraging the use of more, larger aircraft–a move that would disadvantage regional airlines and threaten vital links to Europe’s varied peripheral regions, from Scandinavia to Greece.

In opening the conference sessions, ERA president Marc Lamidey said the ERA board met over the past year in Riga, Lativa; Malta; Luxembourg; and St. Petersburg, demonstrating the scope of its ambitions. Ambrose then delivered his annual ERA directorate report, which covered lobbying on key issues in Brussels, working with EASA and Eurocontrol, collaborating with other airline associations and planning the challenges set to arise in 2012, among other topics.

The second session consisted of a panel discussion on the future of the industry, chaired by Malcolm Hart, president and CEO of Channel Islands-based Aurigny Air Services. Hart underlined the quality of the panel, which comprised Krzysztof Kapis of the Polish Ministry of Infrastructure (and formerly of EuroLOT); Abdul Wahab Teffaha, secretary general of the Arab Air Carriers Organisation,; Boet Kreiken of KLM Cityhopper; Vijay Poonoosamy of Etihad; and Matthew Baldwin, the EC’s director of air transport.

Hart invited delegates to interact with the panel; Jesper Rungholm of Danish Air Transport pleaded from the floor for the legislators to “please leave aviation alone…the oil price by itself makes aviation do its best [to reduce emissions].”

Poonoosamy said the Middle East has seen a “paradigm shift” where countries value aviation and are determined to support it, in contrast to the confrontational, punitive approach in Europe. Teffaha underscored that message with the observation that “the major message is that mature markets have lost their connection with regulators,” while Baldwin said a major problem centers on Europe’s “27 separate airspaces.” He reflected on “tremendous progress” being made with single European sky ATM research (Sesar) and thanked the ERA for its involvement.

Baldwin identified four focus areas: “We have to move forward on the performance [of ANSPs]; we have to deliver on FABs (functional airspace blocks); we now have Eurocontrol as the network manager; and last but not least the application of new technology. We are also serious about getting finance and governance right…Hopefully it will help our airlines go toe-to-toe with the successful emerging airlines of the Arabian peninsula.”

Kreiken suggested that the future could bring regulation that meant airlines had to fly the most efficient aircraft, the fullest aircraft. “That would completely change the way we work,” he said.

Hart reflected on his visit to Brussels earlier this year and asked Baldwin for advice on how regional carriers can escape blanket legislation. Baldwin suggested that while he loved to see the ERA directorate representatives, he also appreciated hearing from airline CEOs, and called for more interaction. “We are stuck in offices in Brussels so want to hear live things, not one step removed,” he said. “We are not in the business of making regulation for the sake of it.”

After Baldwin left to catch an early flight, Poonoosamy beseeched government “not to clip the wings of those that help them fly…If they wake up to this, then there is a great future for our industry.” Ambrose complained that regulation now serves political ends, rather than its intended purpose as facilitator or guardian. “Central regulation out of Brussels is politically motivated, and that’s the root cause of our problems,” he said.

Single European Sky

Florian Guillermet, Sesar Joint Undertaking chief program officer, gave an update of the program and invited ERA airlines to get more involved in helping to validate technologies, at no cost to them, as the deployment phase approaches. He reassured the airlines present that the first phase of deployment would not require updates to most aircraft; rather, he said, ground infrastructure has really lagged in development since the 1960s and needs updating.

Sesar, he said, therefore concentrates on three main areas of modernization: 4-D trajectories (3-D space and the time dimension); the Swim aviation intranet; and increasing automation of ATC, which will allow more capacity without increasing the number of controllers. He also said that airports must play a central role in Sesar. He noted the recent study McKinsey carried out that compared the ‘do nothing’ scenario with the implementation of the European single sky, which, he said, “showed that it is potentially a major growth engine for Europe and its citizens.”